What are the risks of Albania

Appreciating the ideas given during the conference that claims it has two sectors, where new government should focus on not allowing the country to fall into crisis.

“There are two areas that need attention from the new government; the first is the energy sector, which is in deep trouble for a long time. If this section is not properly managed, we can go into a situation that will be very unfortunate for citizens with energy constraints. Another area is the financial sector. Banks in Albania are well-capitalized and have sufficient reserve funds to avoid being affected by fast crisis. But in the recent years, we have seen a fast growth of fast bad loans, which increased from 5 to 25 percent. If we add another category of loan risk, a third of the loan portfolio in Albania is below standard, “said Goldstein.

Ms. Goldstein believes that the deterioration of the loan quality combined with government fiscal behaviour in recent years can impede growth.

“Combined with the high level of public loans in recent years, the loans have slowed down the economy dramatically. And if we want the economy to grow again, loan is a key element”, says Goldstein.
 
She says that this situation is a result of unresolved problems in the early years, which now require urgent intervention. For the financial sector, except supervision strengthening, it proposes a series of fast measures.

“The government should pay arrears to business because this is one of the reasons for the bad loans. Likewise it should develop a realistic plan for the settlement of these obligations and this is very important because, first of all it would demonstrate that the government is committed to keep its commitments and secondly to support the business community and to assist the Albanian economy to grow faster,” explains Goldstein .

As for energy crisis, an urgent and immediate intervention is required, but also a medium-term plan would save this sector from the multi-year crisis.

“First, there should be some short-term intervention. Initially, should be provided energy for next season through domestic production and imports may be needs. Secondly, the government should move quickly to develop a plan to reduce losses in distribution and improve collections. Third, should be paid all obligations of public institutions to energy companies in order for them to be better off financially. During the long-term period more reforms should be applied, to ensure that Albania has a financially sustainable energy sector and to be able to invest to increase resources,” says Goldstein.

The energy sector in Albania is immersed in a confused chain of debts totalling up to ten percent of national output, especially in the last three years, after the government privatized distribution companies.

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